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Alaska Air Group (ALK) Q3 Earnings, Revenues Miss Estimates
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Alaska Air Group (ALK - Free Report) reported third-quarter earnings (excluding 10 cents from non-recurring items)of $2.24 per share, which fell short of the Zacks Consensus Estimate of $2.25. However, the bottom line inched up 1.8% on a year-over-year basis.
Revenues came in at $2,120 million, below the Zacks Consensus Estimate of $2,166.2 million. The top line, however, rallied 35.4% on a year-over-year basis. Passenger revenues which accounted for bulk of the top line (86%), improved 38% on a year-over-year basis.
The below-par performance disappointed investors. Consequently, shares of the company were down in early trading.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 43.8% year over year to 13,811 million in the reported quarter. Capacity or available seat miles surged 44.2% to 16,164 million. Load factor (percentage of seats filled by passengers) decreased 20 basis points to 85.4% owing to capacity expansion outpacing traffic growth.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 4.2% year over year to 11.29 cents. Total revenue per available seat mile (RASM) also declined 6.1% to 13.12 cents in the reported quarter, while yield declined 4.1% to 13.21 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses rose 44% year over year to $1,681 million. Operating income increased 10% to $439 million from the prior-year quarter. Fuel price (economic) was $1.80 per gallon, up 13.9%. Consolidated unit cost or cost per available seat mile — excluding fuel and special items — decreased 2.7% to 7.98 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group exited the quarter with long-term debt of $2,367 million compared with $2,645 million at the end of 2016. At the end of the quarter, adjusted debt-to-capitalization ratio was 53% compared with 59% at 2016-end. In fact, the carrier paid a dividend of 30 cents per share in the third quarter, up 9% year over year.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. (AAL - Free Report) , Southwest Airlines Company (LUV - Free Report) and Union Pacific Corp. (UNP - Free Report) . All are scheduled to report respective earnings numbers on Oct 26.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Alaska Air Group (ALK) Q3 Earnings, Revenues Miss Estimates
Alaska Air Group (ALK - Free Report) reported third-quarter earnings (excluding 10 cents from non-recurring items)of $2.24 per share, which fell short of the Zacks Consensus Estimate of $2.25. However, the bottom line inched up 1.8% on a year-over-year basis.
Revenues came in at $2,120 million, below the Zacks Consensus Estimate of $2,166.2 million. The top line, however, rallied 35.4% on a year-over-year basis. Passenger revenues which accounted for bulk of the top line (86%), improved 38% on a year-over-year basis.
The below-par performance disappointed investors. Consequently, shares of the company were down in early trading.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 43.8% year over year to 13,811 million in the reported quarter. Capacity or available seat miles surged 44.2% to 16,164 million. Load factor (percentage of seats filled by passengers) decreased 20 basis points to 85.4% owing to capacity expansion outpacing traffic growth.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 4.2% year over year to 11.29 cents. Total revenue per available seat mile (RASM) also declined 6.1% to 13.12 cents in the reported quarter, while yield declined 4.1% to 13.21 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses rose 44% year over year to $1,681 million. Operating income increased 10% to $439 million from the prior-year quarter. Fuel price (economic) was $1.80 per gallon, up 13.9%. Consolidated unit cost or cost per available seat mile — excluding fuel and special items — decreased 2.7% to 7.98 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. Price, Consensus and EPS Surprise | Alaska Air Group, Inc. Quote
Liquidity
At the end of the quarter, this Zacks Rank #5 (Strong Sell) company had $1,740 million in cash and marketable securities compared with $1,580 million at the end of 2016. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alaska Air Group exited the quarter with long-term debt of $2,367 million compared with $2,645 million at the end of 2016. At the end of the quarter, adjusted debt-to-capitalization ratio was 53% compared with 59% at 2016-end. In fact, the carrier paid a dividend of 30 cents per share in the third quarter, up 9% year over year.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. (AAL - Free Report) , Southwest Airlines Company (LUV - Free Report) and Union Pacific Corp. (UNP - Free Report) . All are scheduled to report respective earnings numbers on Oct 26.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>